Consumer Responses to `Favorite' Product Removal: Evidence from Beverage Vending Machines

How do consumers react when their favorite product is removed? This paper investigates this question by analyzing individual purchase data from vending machines in Tokyo train stations. We find that the decrease in demand at a consumer’s favorite machine is largely offset by an increase in demand at nonfavorite machines. Surprisingly, demand also increased for products in categories different from that of the removed product. This finding led us to discover that the removal intervention boosted consumer exploration and learning: consumers became more likely to try new products and switch their choices. We posit that prior to the removal, consumers purchased their favorite product at least somewhat out of habit (i.e., an autopilot mode). We also find that high varietyseekers are more likely to choose a substitute at their favorite vending machine, whereas low variety-seekers tend to search for their favorite product at other locations. Although exploration behavior increased uniformly, product switching rose significantly only for low variety-seekers. This suggests that the boosted exploration may mainly benefit high variety-seekers, as it helps them find more products that match their preferences.